Do you want to know why the FBI continued to insist that the Nunes' memo not be declassified and released to the public? The answer is right there on page 2, (see 1b) in the discussion about what was excluded from the application to the Foreign Intelligence Surveillance Court:

The application does not mention Steele was ultimately working on behalf of - and paid by - the DNC and Clinton campaign, or that the FBI had separately authorized payment to Steele for the same information.

I believe that the part in bold is what the FBI wanted out of the memo because it exposes the uncomfortable fact that Christopher Steele was (and had been for some time) a paid asset of the FBI. That is huge news. In other words, Steele was not a mere consultant or sub-contractor for the FBI. He was being paid to provide information/intelligence to the FBI.

There are two classes of FBI "informants." One is serving as a "criminal informant" and the other is as an "intelligence asset." Information from "criminal informants" can be used in a U.S. judicial proceeding and the informant called as a witness. Getting money under that circumstance can be problematic because the source's credibility can be impeached by defense counsel, who can argue that the testimony is purloined.

You do not have to worry about that with an "intelligence asset." In that case the priority is protecting the identity of the source. The fact that Steele had been on the FBI payroll for a while sheds new light on Glen Simpson's testimony (which was leaked by Senator Feinstein) to the U.S. Senate. Simpson testified that Steele told him in late September 2016 that the FBI wanted to meet him in Rome to discuss the dossier.

That struck me initially as quite odd. If Steele was just acting as an average "foreign" citizen who was trying to help the FBI then he could easily have met with the Bureau in London. That city hosts the largest number of FBI agents in the world outside of the U.S. But Steele was asked to go meet in Rome. That's what you do when you are meeting an intelligence asset that the Brits do not know about.

That is the problem.

The United States and Great Britain have had a long standing "understanding" or informal agreement to not recruit each others intelligence and law enforcement personnel as intelligence assets. I chatted yesterday with an old intelligence hand (a U.S. person) who was approached by British MI 6 during a TDY to London. My friend rejected the come on and reported the approach to the CIA Chief of Station (aka COS). The COS was angry with the Brits. They were not supposed to do that, nor are we. But sometimes a target is so attractive that very high level permissions to break the agreements are given.

The real irony here is that the Schiff memo is likely to compound the problem for Steele because it is likely to highlight Steele's prior activities on behalf of the Bureau that predate the 2016 election cycle (remember, Steele was hired by Fusion GPS in June 2016). This is the issue that had FBI Director Wray's panties in a knot. When you sign up a foreign source you vow to protect them. When you expose such a source you make it more difficult to recruit new sources.

There may be another twist to this. Was Steele actually operating as an FBI intel asset with the secret knowledge of the Brits? In other words, was he a double agent or an agent of influence? One way to tell will be watching the reaction of the UK authorities now that they know that Steele was a paid FBI informant. Imagine the outrage here if one of the former CIA or FBI talking heads that are appearing on punditry circuit was exposed as someone getting paid by the Russian version of the FBI or CIA. It would be ugly.

Comment: It's not quite the same thing. Russia is 'the enemy' to both the US and UK. And while the latter two may be countries separated by an ocean, they're unusually close in military-intelligence relations.

The UK media, and thus the UK authorities, have thus far parroted the (Democratic, thus deep state) party line of placing distance between themselves and Steele, characterizing him as being "passionately, ideologically motivated to stop Trump from winning."

The Brits almost certainly colluded to 'Stop Trump', though probably just as a useful offshore workaround for the US deep state to 'get the dirt on Trump' and make it less obvious that the dossier was cooked out of thin air in Langley.

The media (and the trolls on this blog) are working feverishly to ignored the uncomfortable truths exposed by the so-called Nunes memo. But facts are stubborn things, and more facts will be exposed.

Update

Based on some confused comments by our friend The Twisted Genius aka TTG, I need to provide more of the Nunes memo to establish that Steele in fact was a source. According to that memo:

. . .Steele was suspended and then terminated as an FBI source for what the FBI defines as the most serious of violations-an unauthorized disclosure to the media of his relationship with the FBI in an October 30, 2016, Mother Jonesarticle by David Corn.

If this was a simple matter of Steele, having no official relationship with the FBI, simply reaching out to an old friend to pass on information, then TTG would be right to assert that Steele was not a source. But that is clearly not the case. The FBI can only suspend and terminate a source relationship if that person is a source. Very simple.

Let's take a quick look at the article by Corn that got Steele terminated. The Corn piece was part of an orchestrated media campaign (we know that from Simpson's testimony that was leaked by Diane Feinstein) in order to put pressure on the FBI and James Comey, who had just announced that new Clinton emails had been found on Anthony Weiner's laptop. Corn wrote:

On Sunday, Senate Minority Leader Harry Reid upped the ante. He sent Comey a fiery letter saying the FBI chief may have broken the law and pointed to a potentially greater controversy: "In my communications with you and other top officials in the national security community, it has become clear that you possess explosive information about close ties and coordination between Donald Trump, his top advisors, and the Russian government. . . The public has a right to know this information.". . .

But Reid's recent note hinted at more than the Page or Manafort affairs. And a former senior intelligence officer for a Western country who specialized in Russian counterintelligence [Sott.net ed: that would be Steele] tells Mother Jones that in recent months he provided the bureau with memos, based on his recent interactions with Russian sources, contending the Russian government has for years tried to co-opt and assist Trump - and that the FBI requested more information from him. . .

[A] senior US government official not involved in this case but familiar with the former spy tells Mother Jones that he has been a credible source with a proven record of providing reliable, sensitive, and important information to the US government.

In June, the former Western intelligence officer - who spent almost two decades on Russian intelligence matters and who now works with a US firm that gathers information on Russia for corporate clients [Sott.net ed: that would be Fusion GPS] - was assigned the task of researching Trump's dealings in Russia and elsewhere, according to the former spy and his associates in this American firm. . . .

"It started off as a fairly general inquiry," says the former spook, who asks not to be identified. But when he dug into Trump, he notes, he came across troubling information indicating connections between Trump and the Russian government. According to his sources, he says, "there was an established exchange of information between the Trump campaign and the Kremlin of mutual benefit." . . .

This was, the former spy remarks, "an extraordinary situation." He regularly consults with US government agencies on Russian matters, and near the start of July on his own initiative - without the permission of the US company that hired him - he sent a report he had written for that firm to a contact at the FBI, according to the former intelligence officer and his American associates, who asked not to be identified. . . .

The former intelligence officer says the response from the FBI was "shock and horror." The FBI, after receiving the first memo, did not immediately request additional material, according to the former intelligence officer and his American associates. Yet in August, they say, the FBI asked him for all information in his possession and for him to explain how the material had been gathered and to identify his sources. The former spy forwarded to the bureau several memos - some of which referred to members of Trump's inner circle. After that point, he continued to share information with the FBI.

There you have it. The story was right in front of us. What is reported in the Nunes memo is consistent with David Corn's article and with what Glen Simpson testified under oath to the Senate Judiciary Committee.

Comment: So if this theory is correct, then Steele was originally hired by Fusion GPS, who in turn were commissioned by the Clinton campaign/DNC, to get dirt on Trump connections with Russia, but when Steele found 'explosive stuff' - possibly gifted to him by Russians preying on his gullibility - he went around Fusion GPS and the Dems to report directly to the FBI because he had a history of being a source for them.